How Mississippi Income Tax Works in 2026
Mississippi taxes income at a flat 4% on everything above $10,000 in 2026, under the Build Up Mississippi Act signed in March 2025. The law then steps the rate down every year: 3.75% in 2027, 3.5% in 2028, 3.25% in 2029, and 3% in 2030, with revenue triggers that could carry it all the way to zero after that. No other state has a phase-out this explicitly scheduled.
The $10,000 exemption is the key detail for 2026: the first $10,000 of taxable income faces 0%, and only the remainder is taxed at 4%. To partly offset the revenue loss, the same law raised gas taxes on a schedule and cut the grocery sales tax, shifting the burden from paychecks toward consumption.
What Comes Out of Your Mississippi Paycheck
A Mississippi stub shows federal income tax, Social Security at 6.2%, Medicare at 1.45%, and Mississippi state tax at 4% above the exemption. There is no state disability insurance or paid leave payroll tax, and Mississippi cities cannot add a local income tax.
Pre-tax 401(k), HSA, and health premium contributions reduce Mississippi taxable income along with federal, saving 4 cents per dollar at the state level. With the rate falling every year through 2030, each year's state savings are automatic, no planning required.
Worked Example: A $75,000 Salary in Jackson
Take a single filer in Jackson earning $75,000 a year, paid biweekly. Federal tax is about $7,670, FICA takes $5,737.50, and Mississippi's 4% flat tax on income above the $10,000 exemption comes to roughly $2,600. Here is the annual breakdown.
| Gross Pay | $75,000.00 |
| Federal Income Tax | ~$7,670.00 |
| Social Security (6.2%) | $4,650.00 |
| Medicare (1.45%) | $1,087.50 |
| Mississippi State Tax | ~$2,600.00 |
| Net Annual Pay | ~$58,992.50 |
That leaves about $2,269 per biweekly paycheck against gross pay of $2,884.62, an effective total rate near 21.3%. Mississippi's state slice is about 3.5% of gross pay, and the scheduled cuts mean the same salary will keep a little more every year through 2030.
Mississippi Paycheck Details Worth Knowing
A tax with an expiration date
The Build Up Mississippi Act aims to eliminate the income tax entirely, first through scheduled cuts to 3% by 2030, then through revenue triggers. If the triggers keep firing, Mississippi could join the no-tax states within about fifteen years.
Minimum wage and overtime
Mississippi has no state minimum wage law, so the federal $7.25 applies. Overtime is time and a half past 40 hours under federal law.
The grocery and gas tax swap
The same 2025 law cut the grocery sales tax from 7% to 5% while raising gas taxes in steps toward 27 cents a gallon. Mississippi is deliberately moving its tax base from income toward consumption.
Common Paycheck Mistakes in Mississippi
- Using the old 5% or 4.4% rates. The 2026 rate is 4%, and it falls every year after.
- Forgetting the $10,000 exemption. The 4% only applies above it, which saves $400 versus taxing the full salary.
- Assuming the phase-out is guaranteed. The cuts through 2030 are scheduled, but the path to zero after that depends on revenue triggers.
- Ignoring the gas tax increases when comparing total tax burden. The income tax cut is partly funded at the pump.
- Comparing Mississippi to Tennessee on today's rates only. Tennessee is already at zero, while Mississippi is still traveling there.
Frequently Asked Questions
What is Mississippi's income tax rate in 2026?
A flat 4% on taxable income above $10,000, under the Build Up Mississippi Act. The rate falls annually toward 3% by 2030.
Is Mississippi eliminating its income tax?
That is the plan. Scheduled cuts reach 3% by 2030, and revenue triggers could then carry the rate to zero in the following years.
What is the $10,000 Mississippi exemption?
The first $10,000 of taxable income is taxed at 0% in 2026. Only income above that faces the 4% rate.
What is the minimum wage in Mississippi in 2026?
Mississippi has no state minimum wage, so the federal $7.25 an hour applies.
Do Mississippi cities have income taxes?
No. Mississippi municipalities cannot levy local income taxes on wages.
How does Mississippi compare to Alabama?
Mississippi's 4% above $10,000 beats Alabama's effective rate slightly at $75,000, saving roughly $800 a year, and the gap grows as Mississippi's rate keeps falling.
How accurate is this Mississippi paycheck calculator?
It uses 2026 federal figures and Mississippi's 4% rate above the $10,000 exemption. Future scheduled cuts will change the math each year.
Related Mississippi Tools
This page is part of the growing set of state paycheck tools on USACalculator. Compare Mississippi with Alabama to the east, Arkansas to the northwest, and Louisiana to the southwest, or build a matching stub with the Pay Stub Generator. For purchases, the Mississippi sales tax calculator covers the state rate and the grocery cut.
Sources: IRS Publication 15-T, U.S. Department of Labor, Mississippi Department of Revenue. Figures reflect 2026 tax law. This calculator gives an estimate for planning purposes and is not tax advice.